U.S. wholesale inflation rising, but not all that fast

Inflation in the U.S. economy appears to be on the rise, but don’t expect wholesale prices to rise as quickly in April as they did in March.

The producer price index jumped 0.5% in March to mark the biggest gain in nine months. Yet the surprising spike looks like a fluke tied to a major overhaul in how the Bureau of Labor Statistics measures wholesale inflation. The government put the changes in place earlier this year.

That’s why economists look for the increase in the producer price index to slow to a less alarming 0.2% in April. Some even see an outright decline.

Still, wholesale prices have been edging higher lately. The year-over-year increase in the producer price index, for example, rose to 1.4% in March from a post-recession low of 0.9%. And it could climb to as high as 1.7% in April, which would set an eight-month high. The prices of goods imported into the United States, meanwhile, have been trending higher despite a decline in April.

So far these increases haven’t spilled over much into consumer prices, but that could change if the cost of imported and wholesale goods continue to rise. Most economists expect to see a gradual pickup in inflation over the rest of the year, though nothing so big as to alarm the Federal Reserve. The central bank has been far more worried about the low rate of inflation over the past few years than the threat of rapidly escalating prices.

The producer price index will be released by the Labor Department at 8:30 a.m. Eastern.